While the definitions might vary among banking institutions,
the difference is how the transaction is processed and what you can do with each
card.

ATM cards An automated
teller machine card lets a cardholder deposit or withdraw cash, check balances
and transfer money between accounts at a machine, whether at the bank or at a
machine in another location. A personal identification number, or PIN, must be
used with the ATM card.

The transaction is processed over
an electronic fund transfer, or EFT, network, such as Cirrus, Interlink, NYCE,
Plus or Pulse. ATMs have been in use since the mid-1960s, but gained wide acceptance
in the mid- to late-1980s.

Debit cards
or check cards Debit cards or check cards came along in the mid-1990s.
They are issued by a bank and carry a Discover, Visa or MasterCard logo. They
can be used anywhere those cards are accepted. Most debit cards double as ATM
cards as well as point-of-sale cards. Cardholders can use a PIN or sign for purchases,
and when used for purchases such as groceries, they can get cash back.

The
transaction is processed over the bank card's credit card network.

In
both cases, the money is withdrawn from the checking account almost immediately.

For
retailers, there's another difference: PIN transactions cost less in interchange
fees -- the fee they pay to the banks and bank-card issuers to process a purchase
-- than signature-based transactions.

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